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Jun 17, 2016

DealBook Today's Top Headlines - June 17, 2016: A Who's Who of Financiers Expected at Trump Fund-Raiser | Viacom Battle Escalates Again | Microsoft Moves Into the Marijuana Business

 
Friday, June 17, 2016
TODAY'S TOP HEADLINES
By AMIE TSANG
A WHO'S WHO OF FINANCIERS EXPECTED AT TRUMP FUND-RAISER Donald J. Trump is holding a fund-raiser with the Republican National Committee on Tuesday in New York City, Alexandra Stevenson reports in DealBook

The event will be hosted by a who's who of the financial world, including John A. Paulson, whose hedge fund made billions betting on the collapse of the housing market. He will be joined by Stephen A. Feinberg, the founder of Cerberus Capital Management, and Peter Kalikow, the real estate magnate.

Tickets were going for $50,000 a person, although the hosts are paying $250,000 a couple. An invitation seen by The New York Times said that additional details would be disclosed once a reservation had been made.

The attendance of these men, some of whom had not publicly declared their support for the presumptive party nominee, indicate that a small, but growing crowd in the financial sphere is warming up to the idea of backing Mr. Trump. This is crucial for the presidential candidate as Hillary Clinton's donor network includes the billionaire George Soros and she has the backing of some well-known Wall Street executives.

Other hosts include Wilbur L. Ross, a distressed debt specialist, and Anthony Scaramucci, a hedge fund executive. Mr. Scaramucci said on Thursday that he expected about 50 or 60 people to attend the dinner, which is expected to be held at someone's home, although the Secret Service will not disclose the location until the day before the event.

Mr. Scaramucci was among the first on Wall Street to publicly announce his support for Mr. Trump and has been instrumental in introducing Mr. Trump to the hedge fund and private equity world.

But other executives have been more wary of supporting Mr. Trump, who has spoken out against the hedge fund industry and the generous compensation packages hedge funds give themselves. Mr. Trump also said he planned to end carried interest, which allows private equity and hedge fund executives to pay lower taxes by treating their income as capital gains, which are taxed at a lower rate.
VIACOM BATTLE ESCALATES AGAIN Sumner M. Redstone's National Amusements company announced on Thursday that it had moved to replace Philippe P. Dauman and four other directors on the Viacom board, Emily Steel writes in The New York Times. The development sets the stage for the firing of Mr. Dauman from the chief executive role and escalates the war for control over Mr. Redstone's media empire.

National Amusements said in a statement that the "newly constituted board" would evaluate current top executives and take steps "to ensure that Viacom has in place strong, independent and effective leadership."

The new directors are likely to be aligned with Mr. Redstone's daughter, Shari Redstone, who publicly opposed Mr. Dauman's leadership of Viacom. By removing directors loyal to Mr. Dauman, the Redstones would have a clear majority and the power to oust him.

The moves do not take effect immediately and are subject to a court ruling in Delaware.

National Amusements said none of the new directors are affiliated with National Amusements, Viacom or any Redstone family trust. They include Kenneth Lerer, a venture capitalist who helped found the Huffington Post and is chairman of BuzzFeed. Nicole Seligman, a former Sony executive and lawyer who represented President Clinton during his impeachment trial, is also on the list.

"This is a brazen and demonstrably invalid attempt by Ms. Redstone to gain control of Viacom and its management in disregard of Sumner Redstone's wishes and to undermine the current board's ability to represent the best interests of all of the stockholders of Viacom," said Frederic V. Salerno, Viacom's lead independent director.
ON THE AGENDA Data on new residential construction during May will be released at 8:30 a.m.
MICROSOFT MOVES INTO THE MARIJUANA BUSINESS Microsoft is breaking the corporate taboo on pot with a partnership to begin offering software that tracks marijuana plants from "seed to sale," Nathaniel Popper reports in DealBook.

The software is designed to help states that have legalized the medical or recreational use of marijuana keep tabs on sales and commerce, ensuring that they remain in the daylight of legality.

Microsoft is teaming up with Kind, a start-up based in Los Angeles, which offers a range of products, including A.T.M.-style kiosks that facilitate marijuana sales, working through some of the state-charter banks that are comfortable with such customers. Microsoft will be working with Kind's "government solutions" division, offering software only to state and local governments that are trying to build compliance systems.

Even boring parts of the pot world were too controversial for mainstream companies until now. Only a handful of smaller banks are willing to offer accounts to companies that grow or sell marijuana. But it seems like movement on the legalization of marijuana is set to continue.

Microsoft's entry into the infrastructure of the industry will legitimize it. David Dinenberg, the founder and chief executive of Kind, said it had taken a long time and a lot of courting of big-name companies to persuade the first one to get on board.

It is hard to know if other corporate giants have provided their services in more quiet ways to cannabis purveyors. New York State said it was working with Oracle to track medicinal marijuana patients, but there seems to be little other precedent.

"We do think there will be significant growth," said Kimberly Nelson, the executive director of state and local government solutions at Microsoft. "As the industry is regulated, there will be more transactions, and we believe there will be more sophisticated requirements and tools down the road."
MERGERS & ACQUISITIONS »
Jack Dorsey, Twitter's chief executive. To a potential buyer, Twitter poses some unique challenges.
Microsoft-LinkedIn Deal Ignites Twitter Speculation Wishful thinking among Twitter investors aside, there are not many obvious buyers for the social media network, James B. Stewart writes in Common Sense.
Health Care Merger Offers Little Reward but Much Risk AmSurg and Envision are combining in an all-stock deal that will leave each with about half of the combined company, but little value is being created, Jeffrey Goldfarb writes in Breakingviews.
United Airlines flight attendants, represented by the Association of Flight Attendants, outside Newark Liberty International Airport on Thursday.
Years After United Merger, Flight Attendants Work for Two Airlines The lack of an agreement to integrate the work force has complicated scheduling and contributed to flight delays.
Revlon Is Buying Elizabeth Arden for $419.3 Million Two cosmetic giants unite in a deal valued at $870 million, including debt, in which Revlon is paying $14 for each Elizabeth Arden share.
Suncor Begins Auction of Lubricants Business Suncor Energy has started an auction of its Petro-Canada lubricants division, which could fetch the company about $800 million, Reuters reports, citing people familiar with the matter.
Kuka Wants Agreement on German Jobs in Takeover Deal Kuka, a German industrial robot maker, aims to obtain a formal agreement from Midea of China that would preserve German jobs and sites after its planned takeover, Reuters reports, citing a person familiar with the matter.
INVESTMENT BANKING »
HSBC to Pay Record $1.6 Billion to Settle Dispute Over Subprime Lender According to a suit filed 14 years ago, Household International, the subprime group that HSBC took over, made a series of misleading statements about lending practices and the state of the company's books.
Barclays Labels Lawsuit Over 2008 Fund-Raising 'Misconceived' Barclays said the $1 billion lawsuit brought by the British financier Amanda Steveley over the bank's emergency fund-raising from Gulf investors at the height of the credit crisis in 2008 was "fundamentally misconceived."

For the latest updates, go to NYTimes.com/DealBook
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PRIVATE EQUITY »
Apax Partners Begins Auction for Trader Corporation Apax Partners is considering a sale of Trader Corporation, a Canadian company that provides advertising for auto dealers, that could value it at $1.5 billion including debt, Reuters reports, citing people familiar with the matter.
HEDGE FUNDS »
Hedge Fund Industry Continues to Shrink While 291 hedge funds closed in the first three months of this year, just 206 new funds started up, according to data from Hedge Fund Research.
I.P.O./OFFERINGS »
China's Postal Savings Bank Presses On With I.P.O. Postal Savings Bank of China is gearing up for what could be the biggest initial public offering in the world this year at more than $7 billion dollars, even as the market for new listings is in its slowest period since the global financial crisis.
LEGAL/REGULATORY »
After MetLife Ruling, Regulators Push Back on 'Too Big to Fail' Label The Financial Stability Oversight Council is appealing a federal judge's decision to throw out its designation of MetLife as "too big to fail," calling the judge's analysis "profoundly mistaken."
A trader on the floor of the New York Stock Exchange as the Federal Reserve chairwoman, Janet Yellen, spoke on Wednesday morning. The Federal Reserve announced later in the day that it would not raise interest rates.
The Fed's Policies Have Gotten It in a Tangle A look at the Federal Reserve's own data suggests that its policies have led to financial imbalances that place it under pressure to raise rates, Jeff Sommer writes in Strategies.
Reza Zarrab, a gold trader facing trial in New York, in December 2013. Mr. Zarrab had offered to pay for his own detention while awaiting trial.
Judge Denies Trader's Bail Request for Self-Financed House Arrest Reza Zarrab, a gold trader from Turkey, had asked to be allowed to live in an apartment under 24-hour armed guard and GPS monitoring, all at his own expense.
After Insider Trading Conviction, a New Life as a Speaker Since serving a one-year prison sentence, Roomy Khan, a government informant, has been giving lectures to students at business schools and delivering talks to compliance officers.
Spain Investigate European Banks Over Roles in Tax Case Spanish authorities are investigating Banco Santander and BNP Paribas over accusations that they helped shield customers' international transfers from tax authorities, Bloomberg reports, citing a person familiar with the inquiry.
Watchdogs Exempt Sovereign Wealth and Pension Funds From Scrutiny A study by the Financial Stability Board, a group of central bankers and regulators, has excluded sovereign wealth funds and pension funds because of problems collecting data, The Financial Times reports, citing people familiar with the situation.
Canada Said to Experiment with Blockchain The Bank of Canada is working with the country's biggest banks to develop an electronic version of the Canadian dollar, The Financial Times reports, citing slides from a private presentation made in Calgary, Alberta, on Wednesday.
Supap Kirtsaeng may seek $2 million in legal fees from John Wiley & Sons, though the ruling suggested he was unlikely to prevail.
Supreme Court Rules on Legal Fees in Copyright Cases In a unanimous decision, the court said a student who won a copyright case over imported textbooks should be able to seek payment of legal fees from the book's publisher.
Pro-Brexit flags flew from a fishing boat moored in Ramsgate, England, this week.
Why the 'Brexit' Warnings Don't Seem to Be Working in Britain Gloomy forecasts of pain from a breakup have not resonated with British voters during a generally sunny economy.